US President George W. Bush called on Tuesday for "no expansion" of Israeli settlements in Palestinian territories just days ahead of his meeting with Israeli Prime Minister Ariel Sharon. (Photo source: Xinhua/AFP)

US President George W.Bush called on Tuesday for "no expansion" of Israeli settlements in Palestinian territories just days ahead of his meeting with Israeli Prime Minister Ariel Sharon. (Photo source: Xinhua/AFP)

US President George W.Bush said on Tuesday that he would press Israel at a meeting next week to follow the road map peace plan that calls for "no expansion" of Jewish settlements in Palestinian territories.

"Our position is very clear, that the road map is important, and the road map calls for no expansion of the settlements," Bush told reporters six days before a summit at his Texas ranch with Israeli Prime Minister Ariel Sharon.

Bush made the remarks after he was asked about an Israeli plan to expand a major West Bank settlement outside Jerusalem, Maale Adumim, which has angered Palestinian leaders who warn that it could derail peace talks.

Palestinians fear that the plan would cut them off from the eastern part of the holy city which they want as the capital of a future state.

"I'm optimistic that we can achieve a peace in the holy land. I'm optimistic because I firmly believe that Ariel Sharon wants to have a peaceful partner, wants there to be a democracy in the Palestinian territories," said Bush.

"I believe (Palestinian) president (Mahmud) Abbas wants the same thing. And there's a lot of hard work to be done, but we're making progress," he added. "I look forward to meeting the prime minister in Crawford to continue to work with the parties to advance peace."

Reiterating US dissatisfaction at the plan, State Department spokesman Richard Boucher said Washington expected Israel to halt all settlement activity in line with its commitments under the US-backed road map to peace.

"We have noted in the past, noted again, that Israel has made commitments under the road map and under the statements that Prime Minister Sharon has made at Aqaba and elsewhere to stop settlement activity, that we think those are very important commitments and we expect to see them upheld," Boucher said at a news briefing.

Meanwhile, Israeli officials have sought to assure Washington that no construction is imminent under plans to build 3,500 homes for Israelis between the settlement of Maale Adumim and Jerusalem.

"There are no plans to invite construction bids in 2005. It is not at an operative stage," Housing Minister Issac Herzog was quoted by government sources as telling US National Security Council official Elliot Abrams at a meeting in Washington.

In Jerusalem, Israeli Deputy Prime Minister Shimon Peres said he was going to Washington to seek US financial aid for the Gaza pullout plan.

Peres told Army Radio that he will meet US Vice President Dick Cheney and other administration officials to ask them for assistance to the plan.

"The essence of the issue is to coordinate the financial aspectof the Gaza withdrawal," Peres said, adding that he will discuss "distribution of resources ... and to see what can be done to get US assistance for the development of the Negev and the Galilee."

Peres said the money would also be used to develop the Negev Desert and the Galilee, but refused to say how much money Israel is seeking.

An official close to the Bush administration said officials in Washington estimated Israel would request 500 million US dollars in aid, the Israeli Ha'aretz daily said.

Sharon was expected to raise the issue during his meeting with Bush, said the US official.

In Rammalah, Palestinian chief negotiator Saeb Erekat condemned Sharon's statements that he is intending to implement the house-building plan.

Erekat told the Voice of Palestine radio that if Israel carriesout the plan, it would undermine the peace process and the prospects for any future negotiations on the final-status issues.

An armed wing of the Palestinian Popular Resistance Committees of the Intifada claimed responsibility for carrying out two separate armed attacks against Israeli soldiers and settlers in the southern Gaza Strip.

Abu Abeer, spokesman of Sallah el Dein Brigades, told reportersat a news conference that militants of the group blew up a roadside bomb under an Israeli army bulldozer on the borders between the Gaza Strip town of Rafah and Egypt.

He added that his militants also shot and seriously wounded an Israeli who worked near the Jewish settlement of Morag near Rafah.

"The attacks are to reiterate what the group had declared a fewdays ago that the group is not committed to the Cairo agreement of cease-fire with Israel reached among the 13 Palestinian factions,"said Abu Abeer.

He stressed that his group would respond by armed attacks to any Israeli action carried out against the Palestinians in the West Bank and Gaza Strip.